1.
Solar Energy Innovation Symposium
June 6, 2019
Advanced Rate Design Project
NREL Solar Energy Innovation Network

2.
Project Team
• Center for Climate Protection Lead
• TerraVerde Energy LLC Technical Development
• Lancaster Choice Energy Consultation, Virtual Pilot
• Peninsula Clean Energy Consultation, Virtual Pilot
• Grid Policy LLC Policy/Technical Advisor
• California Solar & Storage Association Policy Advisor

3.
Project Goal
• Create a software tool for helping Load Serving Entities design
tariffs that incentivize the deployment of Distributed Energy
Resources.

4.
What’s a DER?
Distributed Energy Resource:
Any customer-side resource for improving the quality and availability of
electric power, system-wide.
• Solar Panels
• Battery Storage
• Smart Electric Vehicle Chargers
• Smart Thermostats
• Smart Water Heaters
• Demand Response Programs

5.
Strategy:
Consider the net effect of a deployment program:
1. Assess net economic impact of DER program.
2. Assess net GHG impact of DER program.
3. Assess value available to share with customers to incentivize DER
deployment.

6.
Scope, as Ambitiously Envisioned
• Software tool works for any Load Serving Entity.
• Software tool sets rates for any DER type.

7.
Actual Scope
Any Load Serving Entity >> California CCAs
• The value of a DER program depends on regulatory environment.
• California CCAs are empowered to set rates without regulatory oversight.

8.
What’s a CCA?
Community Choice Aggregation agency:
A public agency empowered to buy electricity in wholesale markets to sell in
competition with Investor-Owned Utilities.
• Historically aligned with GHG reduction and other community goals.
• Empowered to set rates without regulatory oversight.
• Own very few energy system assets.
• Exploding reach within California.
• Young, small, & relatively nimble.

9.
Actual Scope
Any DER type >> Solar + Dispatchable Storage
Between DER types, very significant variation in:
• Required customer investment.
• Impact on LSE revenues.
• Ability to impact wholesale procurement costs.

10.
CCA Engagement
Through engagement with the CCA Community we narrowed our focus to
analyzing solar + dispatchable storage:
• Focus group calls
• DER values matrix
• 1:1 meetings with Virtual Pilot partners

11.
What’s a VPP?
Virtual Power Plant:
A network of customer sited batteries that can be centrally controlled to
provide grid benefits.
• Dispatch VPP power as an alternative to buying in wholesale power markets.
• Dispatch clean energy as alternative to buying dirty energy in power markets.
• Sell power into wholesale markets when prices are high.
• Store excess generation when prices are low.
• Reduce resource adequacy and other demand-related wholesale costs.
• Participate in utility demand reduction programs.
• Sell into ancillary service markets.

12.
VPP Suppliers
Market Access Operation Strategy DER Aggregation
Olivine x x x
Leap x
AMS x
Stem x
Engie x x
Sunrun x

13.
Tool Creation Roadmap
1. Identify CCA goals for deploying solar + storage systems.
2. Research capabilities and limitations of VPP technology.
3. Analyze average economic benefit per kW of VPP storage.
4. Analyze GHG benefit per kW of VPP storage.
5. Research costs of installing customer-sited storage with solar.
6. Research best practices for incentivizing program participation.
7. Propose tariff structure and terms.
8. Run virtual pilot projects to demonstrate feasibility.

14.
Analyzing Economic Benefit
1. Ingest CCA’s procurement history data.
2. Model CCA’s historic procurement costs.
3. Model the change in load from operating a VPP.
4. Analyze values streams achieved by VPP operating strategy.

15.
Procurement History Data
8760 hours of hour-by-hour procurement cost data (24 x 365 = 8760)
• Bilateral agreements: hourly volume and price
• Scheduled Load: hourly volume
• Day-head market: hourly price
• Actual Load: hourly volume
• Imbalance market: hourly price
• Resource adequacy: hourly cost
• Other fees and credits: hourly cost/credit

16.
Procurement Cost Model
1. Scheduled Load
a. 24 hours of anticipated load, reported one day ahead.
b. Includes bilateral hedges.
c. Scheduled Load – Hedged Load = day-ahead market purchase.
2. Imbalance
a. Imbalance = Actual Load – Scheduled Load.
b. ISO procures power to meet system demand in real time.
c. Imbalance load is deduced retrospectively from meter data.

17.
VPP Strategy: Load Flattening
Flatten your load at: www.FlattenMyLoad.com

18.
VPP Strategy: Load Flattening
Flatten your load at: www.FlattenMyLoad.com

19.
Value Stream: Day-Ahead Peak Avoidance

20.
Value Stream: Sell into Real-Time Market

21.
Value Stream: Resource Adequacy

22.
Stacked Value Streams

23.
Additional Value Streams
• Offsets to customer utility distribution demand charges.
• Improved GHG profile.
• Battery resiliency benefits.

24.
Next Steps: Propose Rate Terms
• Analyze as a program.
• Tri-lateral Agreements (LSE + Customer + Operator)
• Operate to maximize system benefit.
• Align compensation with system benefit.

25.
Next Steps: Virtual Pilot Projects
Analyze customer’s annual retail cost and LSE’s annual wholesale
cost to supply customer under three scenarios:
1. With no Solar + Storage.
2. With Solar + Storage under existing tariff.
3. With Solar + Storage under proposed tariff.

26.
Tool Creation Technical Support/Guidance
‣ NREL and RMI Advisors:
‣ Helped us determine the need to narrow the scope of our design model to a single type of
DER deployment
‣ Helped us determine the need to reduce the target audience from all LSEs to CCA agencies
in California.
‣ Shared procurement expertise which supported us in the process of identifying the VPP
operating strategies that are most likely to yield economic and GHG benefits.
‣ Technical Consultants
‣ Chris Sentieri, Blue Strike Environmental
‣ Jon Wellinghoff, former Chairman of the Federal Energy Regulatory Commission

27.
QUESTIONS?
THANK YOU
Storn White
Director of Software Development
TerraVerde Energy, LLC
storn@TerraVerde.energy
and don’t forget to flatten your load at: www.FlattenMyLoad.com